Joe's Investo-Blog

Rep. Frank eyes Fed audit, emergency lending curbs

Saturday August 29, 2009, 10:47 pm EDT
By Tim Ahmann

WASHINGTON (Reuters) – Rep. Barney Frank, the chairman of the U.S. House of Representatives Financial Services Committee, said he plans legislation to restrict the Federal Reserve’s emergency lending powers and subject the central bank to a “complete audit.”

At a recent town hall meeting, Frank said the House would pass a bill to use an audit to crack open the central bank’s books more widely, but in a way that will not encroach on the central bank’s monetary policy independence.

In addition, he said the House would move to rein in the authority that allows the Fed to lend to a wide range of non-bank firms in “unusual and exigent circumstances.”

A bill sponsored by Texas Republican Rep. Ron Paul that would allow the Government Accountability Office, a federal watchdog agency, to audit Fed interest-rate decisions has won the co-sponsorship of more than half of the House.

Fed Chairman Ben Bernanke has warned that the bill would compromise the U.S. central bank’s policy-making independence and could undermine financial markets and the economy.

Frank said he has been working with Paul on compromise language…

Ahem…, but isn’t it incumbent upon the Fed Chairman, arguably the most powerful man in the world, to explain exactly how an audit can compromise policy-making independence? I’m holding my breath on this one.

Banks, Financial Crises, Politics Banks, Currencies, debt, deflation, monetary policy, Politics, The Fed

Most political speeches are just that, a speech, a lot of hot air. However, there exists in our recent history, one speech that single handedly won the cold war.  It is the speech President Reagan delivered to Moscow State University on May 31, 1988.  The New York Times editorialized: “When people some day look back to the milestones of the cold war, they are likely to remember the day Ronald Reagan extolled freedom, while Lenin looked on.” The speech follows in it’s entirety:

President Reagan:

Thank you, Rector Logunov, and I want to thank all of you very much for a very warm welcome.
Read more…

Politics history, Politics, strategy, war

This is a transcript of Prof. Joseph Peden’s 50-minute lecture “Inflation and the Fall of the Roman Empire” given at the Mises Institute Seminar on Money and Government in Houston, Texas on October 27, 1984. The original audio recording is available courtesy of the Mises Institute.

Two centuries ago, in 1776, there were two books published in England, both of which are read avidly today. One of them was Adam Smith’s The Wealth of Nations and the other was Edward Gibbon’s Decline and Fall of the Roman Empire. Gibbon’s multi-volume work is the tale of a state that survived for twelve centuries in the west and for another thousand years in the east, at Constantinople.

Yet Gibbon in looking at this phenomenon commented that the wonder was not that the Roman Empire had fallen, but rather that it had lasted so long. And scholars since Gibbon have devoted great deal of energy to examining that problem: how was it that the Roman Empire lasted so long,   Read more…

Banks, Currencies, Economics, Financial Crises, Gold, Inflation/Deflation Banks, collapse, Currencies, debt, Economics, economy, exchange rates, fiscal policy, Gold, history, inflation, monetary policy, taxes, The Fed, US treasury, war

The Secrets of China’s Growth: The Government Owns the Banks rather than the Reverse

By Ellen Brown

“The banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. They frankly own the place.” — U.S. Senator Dick Durbin, Democratic Party Whip, April 30, 2009

While the U.S. spends trillions of dollars to bail out its banking system, leaving its economy to languish, China is being called a “miracle economy” that has decoupled from the rest of the world. As the rest of the world sinks into the worst recession since the 1930s, China has maintained a phenomenal 8% annual growth rate. Those are the reports, but commentators are dubious. They ask how that growth is possible, when other countries relying heavily on exports have suffered major downturns and remain in the doldrums. Economist Richard Wolff skeptically observes:  Read more…

Banks, Currencies, Economics, Financial Crises, Inflation/Deflation, Markets Banks, collapse, Currencies, debt, Economics, economy, exchange rates, Gold, inflation, monetary policy, strategy, The Fed, US treasury

Humor, Portfolio Management, Stocks collapse, Humor, Portfolio Management, stock brokers, stock market, Stocks

HOW LITTLE WE KNOW

by Harry Browne

August 22, 1984

You’ve probably had the experience of reading a newsletter’s (blog’s) explanation of what is about to happen in the world. The writer presents a sensible, logical, compelling argument that something is inevitable based on what has gone before and where we are now. His case is so plausible and rational that it’s obvious he must be right.

But then you pick up another newsletter (blog) and find another preview of the inevitable -and it’s exactly opposite to the forecast in the first newsletter. And the second writer’s arguments are just as logical, sensible, plausible, and rational as the first writer’s.

Which one are you supposed to believe? The question could be critical. Each writer might be urging you to invest all your capital in line with his forecast. To choose wrongly could be disastrous.

So how do you decide which one of them is right?   Read more…

Asset Allocation, Economics, Gold, Humor, Markets, Portfolio Management, Stocks Asset Allocation, deflation, Economics, economy, fraud, Gold, Humor, inflation, performance, Portfolio Management, stock brokers, stock market, stock picks, Stocks, strategy

Humor, Markets, Portfolio Management, Stocks Humor, performance, Portfolio Management, stock brokers, stock market, stock picks, Stocks, strategy

by Jonathan Clements

Wall Streeters talk a great game. The real challenge, however, is figuring out what they are really saying.

Below are 33 phrases often heard on Wall Street and how you might interpret them. The list was compiled with help from investment advisers William Bernstein, Eleanor Blayney, Harold Evensky, Deena Katz, Ros Levin, Gerald Perritt and Larry Swedroe. I also got a hand from Journal colleagues Greg Ip and William Power.

But my biggest debts are to Kevin Berozott, an investment adviser in Camarillo, Calif., and John Rekenthaler, research director at Chicago’s Morningstar Inc., both of whom shipped me e-mails filled with hilarious examples.  Read more…

Humor, Markets, Portfolio Management, Stocks Humor, Portfolio Management, stock brokers, stock market, strategy